Parent 2 Child Title Transfer -> Refinance ->Primary vs. Rental Residence

[jam_sf]

What is the name of your state? California

Hello!

My mother wants to do a parent 2 Child transfer of title of her home to me. (P2C transfer: to avoid a property tax increases and any other selling costs)
She has a Mortgage of 4K left (they hold the title/deed). Which I can pay off. BUT
She also has a Home Equity Line of Credit of $200K

BAD!

I would like to refinance her line of credit and assume the debt with a loan in my name and the home as my primary residence I do rent elsewhere, same state (CA) different county.
Is this possible?

I currently rent, but understand there is a way to claim the house as a primary as it is in my family and they would be living there. The advantages to primary vs rental seem to be in the tax benefit.
Is this true?

This would be my first home/entry into the market. From what I understand I would NOT be eligible to receive a mortage unless it was my primary residence anyway, But I can refinance her loan.

I'd prefer to get a fixed rate.

I have great credit, no debt, low rent, savings (for a down payment to reduce the 200K) etc. Comparable homes in the area are going for 450-500K So there is good equity in the property as well.

She wants me to do this so she can focus on her credit card debt, not move, and give me an investment opportunity. In return she would have a home to stay in. I don't plan on selling it unless LIFE happens. At the moment due to her credit card debt she may lose the house anyways if we do nothing ...another incentive :)

Hope this makes sense. Mortgages are new and scary to me.

[FlyingRon]

It's generally a bad idea to transfer title in whole or in part to children while alive.

You say there is a line of credit, if's just a "line" then you can cancel it. If you mean that she has a $200K balance on money she's borrowed on the line, then you have a problem. Any transfer will probably make the line due immediately.

Yes, you can FINANCE (it's not a refinance, for you this will be an acquisition loan) the property. You just need to be able to qualify for a first mortgage sufficient to pay off the money owned.

You can deduct the property taxes and interest if you are living there, and are obligated to pay them (i.e. you are on the deed or mortgage as appropriate) and you actually pay them. You can also do that if it is a rental. The key with the principal residence is that it entitles you to a capital gain exclusion when you sell (which you will most likely need in the foolhardy attempt to transfer the property with out a sale or death).

If your mother is going to continue living there, has run up other sorts of debt, you have very serious reason to be scared? Why do you want to take on this burden? It nets you nothing.